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IDC Finds Substantial ROI for Enterprises Using PagerDuty for Digital Operations Management

In order to keep digital services running around the clock, teams need to be able to solve problems faster—or, ideally, in real time. Additionally, the increasing complexity of digital services and IT infrastructure means teams need a digital operations management platform that:

  • Uses machine learning and AI to reduce noise by grouping similar alerts, enabling responders to focus on what matters
  • Automates routing of incidents to the right resources at the right time
  • Provides real-time incident awareness and full context so technical responders and business stakeholders can quickly and effectively orchestrate a response
  • Has a robust ecosystem of partner integrations with a variety of monitoring, customer support, security, and service management tools so responders can work in the tools they prefer
  • Enables intelligent after-action assessment to learn and benchmark, and improve and automate operational response

Many vendors claim to provide value and help organizations bolster their digital operations management. At PagerDuty, we decided to take it one step further to really quantify the true business value customers can get from using our platform—so we commissioned a study from leading industry analyst firm IDC to provide their own analysis regarding the return on investment (ROI) of using PagerDuty for digital operations management.

To determine that ROI, IDC surveyed eight enterprise organizations that have been using PagerDuty for at least a year, were able to provide a solid accounting of what they were using before adopting PagerDuty, and were willing to share the improvements they realized from using our platform. The interviews collected data and insights from these customers about:

  • Their organization’s digital services
  • The staff responsible for building and maintaining those services
  • The number of internal IT users of those digital services and their current performance (e.g., efficiency and productivity) around the functions of on-call management, event management, and incident response

The result: Below is a snapshot we created based on the results of IDC’s research, in which we assume a team of 10 IT staff using PagerDuty. Using these assumptions, on average, organizations would save over $350,000 a year in staff productivity per 10 IT staff when using PagerDuty as their digital operations management platform.

Total cost per year (x12): $465,319

Total cost per year (x12): $108,766 

Total cost per year before PagerDuty: $465,319
Total cost per year after PagerDuty: $108,766
Total savings per year with PagerDuty: $356,533

The IDC analysis also examined the benefits various operational teams experienced and found that:

  • IT infrastructure, IT security, and customer support teams realized 16%, 8%, and 10% efficiency gains, respectively
  • DevOps teams realized 23% higher productivity
  • Overall, IT troubleshooting staff realized 11% efficiency gains

Factors Driving ROI

What drives a lot of this amazing ROI is a mix of improvements to the performance and productivity teams responsible for managing digital operations. This, in turn, results in improved uptime, a better customer experience, and revenue protection.

Specifically, performance and productivity improvements come from reducing alert noise and decreased downtime. One customer shared that “the ability to identify noise from real critical issues and a reduction in mean-time-to-resolution (MTTR) were factors. Before, we had all alerts, high and low [priority], coming in via email. Since we moved everything to PagerDuty, we have seen a 50% reduction in MTTR year-over-year.”

Another customer shared that they saw a 30% reduction in P1 and P2 incidents in just six months, which improved their customers’ experiences overall.

Finally, one customer highlighted that their teams are happier because they are no longer awakened at night for no reason and also have more time to look into why issues are happening, enabling them to become much more efficient at addressing incidents when they do happen.

Ultimately, on average, the organizations interviewed by IDC realized the following annual average benefits:

  • IT staff productivity benefits of $2,551,000 ($9,400 per 100 IT users)
  • Business productivity benefits of $613,000 ($2,200 per 100 IT users)
  • Risk mitigation/user productivity benefits of $396,000 ($1,500 per 100 IT users)

When you add it all up, these PagerDuty enterprise customers averaged $3.56 million in annual business value savings ($13,100 per 100 IT users per year), amounting to what IDC refers to as “a substantial three-year ROI of 731%” with a payback period of only 4.3 months.1

For a full review of IDC’s research results and analysis, including additional customer insights, visit www.pagerduty.com/resources/reports/idc-business-value/.

1. “PagerDuty Helps Organizations Optimize Their Digital Operations Management,” IDC, Doc #US45630719, November 2019.